Feeling the Pressure

Say what you will about the ongoing Centers for Medicare & Medicaid Services
(CMS) saga regarding power mobility coverage criteria, new codes and new allowables,
but there is this good news: The size of the power wheelchair and scooter market,
relative to home medical equipment in general, is large enough that it gets
a lot of attention.

Compare that uproar to the much smaller seating & positioning niche, composed
of cushions, power seating functions and positioning hardware such as headrests,
ankle huggers, abductors, adductors and laterals. The coverage criteria, new
codes and accompanying allowables have caused big headaches here, too, and there's
definite concern that some beneficiaries, particularly on the high end of rehab,
are not getting the equipment they truly need.

But because the prices of the items in this niche are lower, this portion of
the market has been somewhat overshadowed not only by bigger-buck wheelchairs
and scooters, but even by concerns over cuts to other DME items and services,
such as portable oxygen.

The Current Landscape

So where does that leave seating & positioning? What does its funding landscape
look like right now?

"I don't think I would say things are okay," says Invacare Corp.'s
Mark Sullivan. "If you take just the basic (wheelchair ) cushions and backs
-- not the powered stuff -- we've gone through a couple of cuts. So the industry's
taken some pretty good hits on that over the last couple of years. It's stable
right now, but really, (CMS) has cut back too far. It gets very, very difficult
to afford some of the higher-end cushions."

And just because end-users haven't been flooding their legislators with protests
doesn't mean consumers haven't already been hurt, Sullivan says.

"It's always hard to prove access problems, because consumers tend to
not complain," he explains. "But we have heard that some providers
will not provide certain high-end cushions" because they literally can't
afford to.

Sullivan adds that some other positioning equipment "hot spots" besides
high-end cushions also remain. "We've got the issue with power elevating
legrests -- what (CMS) used to allow (i.e., the reimbursement rate) for each
is now (a) per pair (rate). So it's become very difficult for people to be able
to afford to provide power elevating legrests. That's been a significant problem."

And ELRs aren't the only area of concern, Sullivan says. "Certainly, (there
are other trouble spots) in the power positioning area, such as seat elevation
(and) standing -- which CMS continues to deny as not medically necessary. Let's
take seat elevation -- it's something almost every consumer would benefit from
in the home in doing MRADLs (mobility-related activities of daily living) in
terms of grooming, transferring, eating, doing dishes. Seat elevation helps
with all of that, and it's used in the home -- that's where you need it. It
doesn't do you all that much good outdoors. So it's kind of ironic that Medicare
refuses to pay for that."

Providers are having similar difficulties in medically justifying standing
equipment, Sullivan says. "Standing is more limited in terms of the number
of people that can benefit from it. Obviously, if you've got some contractures,
you can't really stand. But for some people, in terms of access, (standing)
provides a great function in the home."

Sullivan says funding for tilt and recline functions is "pretty much okay,"
but he adds, "Again, we went through some cuts about two years ago, which
hurt."

Overall, Sullivan compares the seating & positioning funding landscape
to a famous metaphor. "It's the old saying, 'Death by a thousand cuts.'
Each of these things, by itself, is not a death blow. But combined -- and on
top of that some of the cash-flow problems people are having as some of the
states and managed-care organizations convert over to the new coding structures,
the accreditation and competitive bidding (programs) that are coming… these
things are cumulative."

The ROHO Group's Dave McCausland points to CMS' own Part B Extract Summary
System (BESS) Carrier Data File -- in simple terms, how much CMS actually spent
-- as proof that Medicare funding of seat cushions has sharply declined the
last few years.

"What this shows is a substantial drop in expenditures and utilization
of seat cushions since the implementation of the new policy," McCausland
says. "With the cutting of the allowables and the tightening up of the
coverage criteria, (the 2005 expenditures, which are the most recently available
numbers) are almost half of what they were in 2003… the fee schedules were
cut so dramatically. You're talking about cuts of 20, 30, 40 percent. You compound
that with utilization requirements, and it's a pretty stark market for seating
right now."

Quoting the BESS Data File, McCausland points to CMS expenditures on seat cushions
for 2003, the last year before CMS' policy change. McCausland says the BESS
numbers show CMS spent more than $55.5 million solely on seat cushions in 2003.

In 2005, CMS lumped together all its expenditures for seat cushions AND equipment
newly labeled with the miscellaneous K0108 code. After adding seat cushion and
K0108 expenditures together, CMS said it still spent just $38.3 million total
in 2005. "That's a cliff," McCausland says of the expenditure drop-off.
The number is even more dramatic when you consider that the sharply reduced
$38.3 million figure for 2005 includes K0108 products -- defined as miscellaneous
wheelchair parts and accessories -- that aren't even cushions.

"The two problems that still are causing this particular market segment
to be depressed," McCausland says, "are the fact that the fee schedules
are so low and that the methodology that requires you to match specific ICD-9s
(codes) is really not dynamic enough to reflect the varieties of conditions
that actually exist out in the marketplace."

McCausland related a recent conversation with a supplier who was attempting
to justify a skin-protection cushion for a client with a litany of medical conditions.
"He went through all the problems this person had, but unfortunately, the
(ICD-9) diagnosis wasn't there. We could qualify the person for a positioning
cushion, but not for skin (protection)." The supplier's incredulous comment:
"So I have to wait for the person to literally (experience skin) breakdown
before I can protect him?"

The Headrest Example

While headrests and head positioning systems are just one seating & positioning
funding "hot spot," they were singled out by several industry members
as examples of just what's wrong with the current funding picture.

Sunrise Medical's Tom Whelan explains the problem this way: "In the HCPCS
code set, there's only one code -- E0955 -- available for all headrests. A headrest,
by definition, can be as inexpensive and simple as a piece of foam glued to
a piece of wood with any type of covering, mounted to another piece of wood,
mounted to a wheelchair. That's a headrest. So is this example -- we make a
headrest that has four individual positioning pads that go around the head that
connect to a two-bar linkage so that when you move your head to rotate from
left to right, you'd be held up and supported, but you'd have a natural rotation
at the cervical spine."

Whelan says both of these headrests would be reimbursed at $212, according
to current Medicare allowables.

"If you look at our marketplace and the sensitivity we have to fraud and
abuse, when you submit $212 for a piece of plywood bolted to a chair, (the funding
system is) getting abused," Whelan points out. And he adds that manufacturers,
providers and ultimately end-users are hurt when the same payor is only willing
to reimburse $212 "for all the time, effort and everything it takes to
put in a rotational headrest, plus make it… So the code system is not supposed
to, legally, deny access and facilitate fraud and abuse. But that's what happens
when you have this kind of code set."

"There are two codes used for headrests -- E1028 and E0955, with E1028
being a hardware code," says Gabriel Romero, Stealth Products. "I've
got products that have multiple hardware (pieces) on it. We have head-positioning
and head-support -- two totally different types of items. The industry knows
it, but SADMERC didn't know it. We have multiple items that all do a special
thing -- there are pads with gel for pressure breakdown, there are positioning
pads that will actually align somebody… it's a system, but (CMS) gives
it a general code. They'll say, 'What do you mean you're paying $900 for this
headrest? Give 'em that $200 headrest.'"

One Code Fits Few

The common concern that seating & mobility specialists voiced is that the
current code set is not doing a detailed enough job of differentiating between
basic and more complex products.

One such example, says Varilite's Kevin Coleman, is high-end wheelchair cushions.
"Although CMS created adjustable and non-adjustable categories of cushions,
the Skin Protection and Skin Protection & Positioning classifications imply
that adjustable and non-adjustable cushions perform equally. This has created
a risk that clients may be downcoded to a cushion that is not the best solution
for them."

Romero says, "We work with SADMERC on the coding and up-and-coming codes.
What I found out is we don't have enough codes. You hate saying that, because
I'm not a dealer -- I'm not the one going to the insurance companies and trying
to figure it out. But really, we don't (have enough codes) -- because they're
specialty items. And in our industry, with seating & positioning items,
they're not coded right. So you may have a pad that has a special type of hardware,
but (the allowables) aren't broken down right."

Romero says he also met with competitive manufacturers who make the same sorts
of products that Stealth does -- and there was a consensus that the existing
codes just weren't able to adequately meet dealer or end-user needs. "We
have dealers who are saying, 'I can't break this down and get paid back for
this because the allowables are so low.'"

Exceptions to the Rule

In some cases, positioning equipment for more involved clients -- i.e., equipment
with greater customization or complexity -- has been reclassified under the
miscellaneous K0108 code (wheelchair component or accessory, not otherwise specified).
In those cases, the equipment could qualify for greater reimbursement rates
(assuming the required justification and documentation are provided) than it
would have received had it not been given the miscellaneous code.

The problem: Is the miscellaneous code being evenly and fairly applied to all
the equipment that deserves it?

Whelan says a mandate from CMS required the Statistical Analysis Durable Medical
Equipment Regional Carrier (SADMERC) to stop reclassifying already-coded products
under the miscellaneous code. Whelan added that though SADMERC staff agreed
that not all headrests are created equal or perform identically, headrests nonetheless
continue to be all contained under the E0955 code.

"I don't blame Dr. (Doran) Edwards and the SADMERC staff, because that's
not where the problem lies," Whelan says. The result, he adds, is "an
inequitable landscape," because products that were reclassified under the
miscellaneous code remain under the K0108 code, but no additional products can
be considered for K0108 reclassification because of that CMS mandate.

Accentuating the Positive

Whelan says the SADMERC "has been working with us to develop code sets
that are more robust." The hope is that a greater number and a greater
variety of codes will be able to more accurately describe the differences among
complex products. Since CMS has already nixed the idea of continuing to reassign
the miscellaneous codes to products, adding additional codes seems to be the
only way to go.

"Hopefully, the solution is that sometime in the next year and a half,
we'll get a new code set," Whelan says.

Of course, even the prospect of a new code set does not automatically give
this story a happy ending, as Whelan points out: "A year and a half of
people getting denied access to medical technology is a problem."

"It's not all doom and gloom in terms of the industry," Sullivan
says. "People are going to figure out how to provide this stuff to the
consumers. They're going to have to figure out a way to run their businesses
differently. Quality is going to be important just because you can't afford
to go out and keep fixing things. You've got to turn down the number of offerings.
You just have to have a much leaner operation."

"If there is any silver lining to what has happened to wheelchair expenditures
since the implementation of the new policy," says McCausland, "it
is that I hope that what has happened will keep this being a category that (CMS)
competitvely bids. Because there's no money left. There's no blood left."